Conventional Home Loan Benefits

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Conventional Home Loan?

Are you looking for a low cost loan with great benefits for saving money over time? Here are the reasons why a Pennymac Conventional Home Loan may be a perfect fit.

  • Has a lower cost than many government programs that require mortgage insurance
  • Available for primary, second homes, investment properties
  • Choose a fixed-rate or adjustable rate mortgage (ARM)
  • Wide range of down payment options

Today's Conventional Loan Rates

See at a glance how VA IRRRL rates stack up today. Compare different mortgage loan types and learn more about how VA IRRRL can make your monthly mortgage payments more stable and affordable.

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Keep in mind, these home loan rates are based on certain assumptions and may differ from your specific financial needs.

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*

Discount points apply, view assumptions for details. Rates valid on:
Wed, Jul 12 2017, 09:49 AM PT and are subject to change without notice.

Products
Rate*
APR*
Keep in mind, these home loan rates are based on certain assumptions and may differ from your specific financial needs.

Apply Now

*

Discount points apply, view assumptions for details. Rates valid on:
Wed, Jul 12 2017, 09:49 AM PT and are subject to change without notice.

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For a rate quote, please call a Pennymac Loan Officer at (866) 549-3583.

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What Is a Conventional Home Loan?

Conventional loans are a great lower cost mortgage option for people who can afford to take advantage of some of its key benefits. They can work for conventional purchases including primary residences, second homes, or rentals, and can also work well for refinancing. They’re available in adjustable rate and fixed rate types depending on needs, and can have low down payment options for with mortgage insurance, and a 20% down payment without. We’ve highlighted the benefits of some different mortgage types within conventional home loans here.

Mortgage Type
Benefits
Mortgage Type
Conventional Purchase

Pennymac offers a variety of conventional loan options to help borrowers purchase their dream home. Borrowers with enough funds for a 20% down payment can avoid mortgage insurance immediately while others can have it removed with an appraisal after reaching an 80% Loan-to-Value (LTV). There is also added flexibility to accommodate multiple types of properties, including second homes and investment properties. Regardless of how you can benefit from a conventional loan, Pennymac will work with you to make sure all your options are in front of you.

Rates & More Info
Benefits
  • Avoid mortgage insurance with a 20% down payment
  • Term options are more flexible and easier to customize and match to your financial needs
  • They can be used for many types of properties, from single-family homes to condominiums
Mortgage Type
Conventional Refinance

For homeowners looking to save on their current mortgage payments, Pennymac also offers conventional refinance loans. Refinancing into a conventional loan is a great way to get a great rate at a term that suits your financial goals. Best of all, you can refinance into a conventional loan from any other kind of loan.

Rates & More Info
Benefits
  • All you need is an 80% LTV to avoid mortgage insurance
  • Flexible term options could enable you to save money without extending the length of your loan
Mortgage Type
Conventional Cash-Out Refinance

A Cash-Out Refinance Loan from Pennymac is a way to access the equity in your home to tackle things like home improvements, lingering debt or any other expenses that you need help managing. In some cases, you may also be able to lower your monthly interest rate as well. Pennymac offers a wide range of cash-out refinance options to suit any number of needs, including adjustable and fixed-rate loans in a variety of term lengths.

Rates & More Info
Benefits
  • Use cash from your equity for anything, including home improvements or paying off high-interest debt
  • Manage your debts at the best possible rate
  • Consolidate other debt from multiple sources, like auto loans and credit cards, into a single payment and simplify your finances
Mortgage Type
FHA-to-Conventional Refinance

Many home buyers opt for a home loan insured by the Federal Housing Administration (FHA), often because of the minimal down payment and flexible financial requirements. These loans are a great way for first-time homebuyers to get financing but sometimes a transition to a conventional loan can make more sense after you've built equity. Refinancing into a Conventional loan can often lower your monthly payment by both lowering your rate and removing mortgage insurance. Even if you're not lowering your rate, eliminating mortgage insurance alone could still save you both on your monthly bill and over the life of your loan.

Rates & More Info
Benefits
  • Get a lower interest rate and lower your monthly payments*
  • Reduce or remove your mortgage insurance payments
  • Consolidate other debt from multiple sources, like auto loans and credit cards, into a single payment and simplify your finances

*By refinancing your existing loan, your total finance charges may be higher over the life of the loan.

Who Is Eligible for a Conventional Loan?

While products like VA, USDA and FHA loans are structured to make home buying possible for a wider range of people, conventional loans have somewhat more stringent standards. Qualifying for a conventional loan generally requires the borrower to show an overall stronger financial profile to the lender in order to qualify for some of the unique benefits.

A few of the key eligibility requirements include:

  • Good credit – Generally credit scores of 620 or higher depending on the transaction, though the FICO requirement may vary from lender to lender
  • Minimum 3% down payment – While you may choose to pay as little as 3% down, an approximately 20% minimum down payment is required to eliminate the need for mortgage insurance
  • Cash reserves – You should have at least two months cash reserves after closing to cover your loan costs
  • Proof of income – You will need to show steady income to cover the cost of your loan and self-employed individuals will need to supply two years of tax returns
  • Debt-to-income – Your debt-to-income ratio should be no more than 45%, but can go up to 50% in limited cases. This is the percentage of your monthly gross income that is paid out to recurring debts.

Why Choose Pennymac as Your Conventional Mortgage Lender?

Working for one of the top national lenders, Pennymac Loan Officers have earned a reputation for focusing on the unique needs of every customer. Whether you’re a first-time homebuyer interested in a conventional home loan or looking to refinance your existing mortgage, our specialists are equipped to help borrowers through each and every step of the conventional mortgage process. Interested to learn more about what Pennymac can do for you? Get your own customized quote today.

Frequently Asked Conventional Mortgage Questions

Why Do so Many Home Buyers Choose the 30-Year Fixed?

When most people think of mortgages, they think about 30-year fixed-rate loans. There are many reasons to choose this type of loan but the most popular is probably the security of knowing what you’ll be paying over the life of your loan. While some people know they will only be in their homes for a finite amount of time and an adjustable-rate mortgage (ARM) will save them money, many prefer the stability of a fixed-rate loan.

Tip: Use our home loan calculator to estimate your conventional loan rate and monthly payment, including taxes and insurance estimates to get a clearer picture.

What Kind of Properties Can I Buy with a Conventional Mortgage?

Conventional mortgages are relatively versatile loan products that can be used for a wide range of different types of properties, including vacation or investment properties. Some of the properties you can finance with a conventional mortgage include:

  • Single family homes (attached/detached homes)
  • Planned Unit Developments (attached/detached homes within a homeowner’s association)
  • 2-, 3-, and 4-unit properties
  • Condominiums

Can I Get a Second Mortgage to Eliminate PMI?

Piggyback mortgages are second-lien mortgages used to “piggyback” off the first-lien mortgage on a home purchase. These are popular because they help buyers avoid private mortgage insurance when they’re not able to meet the 20% down payment threshold. Piggyback mortgages are primarily portfolio loans and as such the qualifying criteria can vary considerably from lender to lender.

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